Euronext wheat futures rose to fresh six-month highs on Wednesday, buoyed by hopes that a weakening euro will boost exports, while a rise in Chicago wheat also supported. Market participants were also making adjustments before the expiry of options on front-month March futures at Wednesday's close, traders said. March milling wheat on the Paris-based Euronext exchange unofficially closed unchanged at 173.00 euros ($183.3) a tonne, after earlier reaching a six-month high of 173.75 euros.
May wheat, now the most active contract on Euronext, ended up 1.00 euro or 0.5 percent at 175.50 euros, after earlier reaching 176.00 euros. Both delivery positions were trading at their highest price since mid-August 2016. "The lower euro has been the main driver behind the price strength, along with the steadier trend in Chicago," one Euronext trader said. "The exiting of March options was also shaping trade."
Recent strength in old-crop Russian prices was also underpinning the western European market and offsetting background pressure from large global wheat inventories. German cash market premiums in Hamburg were cut as rising Paris prices brought more selling.Standard wheat with 12 percent protein content for March delivery in Hamburg was offered for sale at 3 euros over the Paris May contract against 4 euros over on Tuesday. Buyers were seeking 2.5 euros over.
"I would certainly not call it a flood of selling but some inventory owners are cashing in on higher outright prices," one German trader said. "But the market remains overall supported by expectations of good German export shipments." "I expect brisk German port loadings of wheat in the rest of February and in March following brisk shipments in January. Saudi Arabia and the African continent remain the main export markets for German wheat. Iran is hardly a customer this season." One ship is sailing from Hamburg this week with 30,000 tonnes of wheat for Morocco and another has sailed from Hamburg in the last week with 35,000 tonnes for Tanzania, traders said.
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